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Genoil: 2020 fuel decisions

Genoil, a Canada-based clean technology company, is seeing opportunities from the impending ship emission regulations in 2020 for its innovative proprietary technologies.

The company is mainly engaged in the development of technologies relating to the oil and gas and shipping industry. It offers technologies such as heavy oil upgrading technology, oil/water separation technology.

David Lifschultz, CEO of Genoil, reckons there are real critical challenges for the marine fuel market in relation to ensuring compliance to the impending ship emission regulations

According to Lifschultz, the 2020 start date of the global 0.5% sulphur regulation will have a dramatic impact on the shipping industry, fundamentally transforming the marine energy supply chain.

“The significant increases in operational costs for burning distillates, or the huge upfront capital expenditure necessary to install scrubbers or adopt LNG fuelled engines will dramatically impact ship owners’ profitability, and in some cases, potentially their continuity,” Lifschultz warns.

Lifschultz says he has not seen a widespread uptake of scrubbers, and he believes if this did suddenly happen in the next two years, then there are concerns over the ability to meet demand due to a lack of shipyard space.

In addition, he sees the infrastructure and standards required to bunker LNG are wholly under-developed on a global basis, and low-sulphur, distillate-based blends are causing significant concern within the market, based on uncertainty over product formulation, and the potential negative impact they could have on a ship’s engine.

Lifschultz reckons the key solution is to utilise the 250m tonnes of heavy fuel oil, which will effectively be made redundant – but still exist as a by-product – post 2020.

Genoil has developed an innovative proprietary technology, the Hydroconversion Upgrader (GHU), which converts heavy crude oils and refinery bottoms into clean burning fuels for the transportation industries, including shipping.

According to Lifschultz, currently 85% of all desulphurization that takes place worldwide is done via hydroconversion. Genoil’s proprietary technology with super-saturation, further increases the level of desulphurisation to make bunker fuel compliment with 2020 legislation.

“The implementation of the GHU technology can lend assistance to the marine fuel supply chain, helping to meet the low sulphur regulations. It will not only negate ship owners from having to switch to LNG or install scrubbers to meet the regulation requirements, but also ensure fuel suppliers have a reliable supply of compliant fuel oil,” Lifschultz says.

Genoil plans to develop a desulphurization and upgrading project with its consortium partner Beijing Petrochemical Engineering Company (BPEC) under a recently signed $5bn letter of intent. The company is also talking to a number of ship owners to raise awareness for the commercial and compliance benefits of the GHU product.

Talking about LNG as fuel for ships, Lifschultz believes that the cooled gas is certainly not a short-term solution, but it requires significant upfront capital expenditure to switch to an LNG-fuelled engine, and the global infrastructure, as well as the bunkering standards required are currently very under-developed.

“While LNG provides compliance for SOx regulations, studies have shown that LNG-fuelled vessels emit significantly more carbon monoxide and hydrocarbon emissions, with 85% of the hydrocarbons comprising methane, which presents 28 times the global warming capacity of CO2,” Lifschultz says.

“Suppliers are unwilling to invest more in LNG infrastructure until the market has demonstrated that there will be demand, and the market is unwilling to retrofit its fleet until it is sure that there will be infrastructure. It’s a catch 22 situation, but one that makes it unlikely that LNG will be the fuel of choice for the global fleet in the near future,” Lifschultz concludes.


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